Taxes, medical marijuana part of 3-way budget negotiation

ALBANY >> The budget plan advanced Friday by New York’s Senate set the stage for a complex two-week negotiation with the governor and Assembly on tax cuts, campaign finance reform, legalizing medical marijuana and other issues.

Talks beginning Monday are intended to resolve differences in their budgets to pass one plan for spending more than $142 billion. The state’s new fiscal year starts April 1.

“I call them the Christmas wish list of budget making because the numbers don’t have to add up and they just put in everything that they want,” Gov. Andrew Cuomo said in a radio interview Friday. He said this year’s biggest issue is tax cuts, noting that the Senate — unlike the Assembly and him — does not include a renter’s tax cut for low-income city residents. He called that “unfair” and “a non-starter.”

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— PROPERTY TAXES:

The Senate would modify Cuomo’s proposed two-year freeze for school districts and municipalities that stay within a 2 percent tax cap. Cuomo would make tax rebates to homeowners in jurisdictions that meet the spending limit and then consolidate services to save money. The Senate called for making the tax relief permanent and giving credit for recent consolidation efforts.

The Assembly instead proposed a “circuit breaker” — taking into account property taxes relative to homeowner income — for those earning less than $200,000 a year.

“The local governments are resisting it. They don’t want to feel pressure to cooperate with their neighboring local governments,” Cuomo told WNYC radio Friday. “I frankly want to pressure them.”

— ESTATE TAXES:

All three proposals would raise the exemption threshold above $1 million. The Assembly proposed $3 million, while Cuomo backed using the $5.34 million federal exemption level while cutting the state tax rate from 16 to 10 percent over four years. The Senate proposed a minor change to Cuomo’s plan to avoid adding the value of gifts back to estates.

For corporate taxes, Cuomo proposed eliminating the separate bank tax and subjecting New York banks to the corporate franchise tax while cutting the rate from 7.1 to 6.5 percent in 2015. The Assembly backed keeping the 7.1 tax rate while endorsing the bank change, which would let Manhattan’s big investment banks pay taxes on only 8 percent of their securities income, which some critics called a gift to Wall Street.

Cuomo estimates the revisions will cost the state $205 million in 2015, but the Senate said they should be “revenue neutral.”

The Senate bill included the bank and other provisions and its corporate tax cut would start in 2016.

— MARIJUANA:

The Assembly budget allows medical practitioners to dispense marijuana to patients with debilitating illnesses. Patients would be allowed to have up to 2.5 ounces. The Assembly would set a 10 percent excise tax on the retail price of medical marijuana.

Cuomo said he will allow a limited study for 20 hospitals to dispense marijuana to patients with diseases that meet Department of Health standards.

The Senate did not include any marijuana measures.

— CAMPAIGN FINANCE REFORM:

Cuomo proposed a system similar to New York City’s with 6-to-1 public matching funds for small contributions up to $175. He would restrict contributions to political party “housekeeping accounts” to $25,000 annually and close the loophole on giving by limited liability corporations.

The Assembly has passed legislation for 6-to-1 public matching funds up to $250 contributions for statewide and legislative offices. It would create a Fair Elections Board and independent enforcement counsel at the State Board of Elections

The Senate has proposed modifying Cuomo’s proposal without specifying any changes.